South Carolina Pub. Interest Found. v. Greenville Cnty., Appellate Case No. 2010-154507

CourtCourt of Appeals of South Carolina
Writing for the CourtGEATHERS
PartiesThe South Carolina Public Interest Foundation and Edward D. Sloan, Jr., individually, and on behalf of all others similarly situated, Respondents, v. Greenville County, Herman G. Kirven, Jr., Judy Gilstrap, Eric Bedingfield, Jim Burns, Scott Case, Joseph Dill, Cort Flint, Lottie Gibson, Mark Kingsbury, Xanthene Norris, Robert Taylor, and Toney Trout, Appellants.
Decision Date01 August 2012
Docket NumberAppellate Case No. 2010-154507,Opinion No. 5016

The South Carolina Public Interest Foundation and Edward D. Sloan, Jr., individually,
and on behalf of all others similarly situated, Respondents,
v.
Greenville County, Herman G. Kirven, Jr., Judy Gilstrap, Eric Bedingfield, Jim Burns, Scott Case, Joseph Dill,
Cort Flint, Lottie Gibson, Mark Kingsbury, Xanthene Norris, Robert Taylor, and Toney Trout, Appellants.

Appellate Case No. 2010-154507
Opinion No. 5016

THE STATE OF SOUTH CAROLINA In The Court of Appeals

Heard June 7, 2012
Filed August 1, 2012


Appeal From Greenville County
John C. Few, Circuit Court Judge
D. Garrison Hill, Circuit Court Judge

REVERSED

Boyd B. Nicholson, Jr. and Bonnie A. Lynch, both of Haynsworth Sinkler Boyd, PA, of Greenville, for Appellants.
James G. Carpenter and Jennifer J. Miller, both of Carpenter Law Firm, PC, of Greenville, for Respondents.

GEATHERS, J.: Respondents, South Carolina Public Interest Foundation and Edward D. Sloan, Jr. (collectively, SCPIF), brought this declaratory judgment

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action against Appellants, Greenville County and the individual members of Greenville County Council (Council) (collectively, the County), challenging the County's establishment of the "County Council Reserves" account as an unlawful delegation of legislative authority. The County seeks review of the trial court's order granting summary judgment to SCPIF, arguing that the account in question is lawful and SCPIF's current action is barred by res judicata. The County also seeks review of a second order granting SCPIF's request for attorney's fees and costs. We reverse.

FACTS/PROCEDURAL HISTORY

For its 1994-95 fiscal year, the County established an account in its annual operating budget entitled "County Council Reserves." Funds in this account were set aside to enable Council to address "special community needs not normally falling with [sic] the operational purview of County government" and to "provide for nonrecurring community requests." In 1996, Council adopted a resolution limiting the use of the Council Reserves account to "infrastructure purposes such as flooding and drainage, roads, lights, sewer, and public buildings and grounds."

In 1996, Edward D. Sloan, Jr. (Sloan), filed an action against the County challenging the legality of the Council Reserves account, beginning with fiscal year 1994-95. Sloan's Third Amended Complaint listed donations from the County to several private organizations and political subdivisions spanning "from 1994 through September, 1997." The complaint, which set forth eleven causes of action, took issue with the use of Council Reserves for non-county matters. The complaint also cited perceived procedural irregularities in the continued use of Council Reserves without Council voting on each expenditure or appropriation.

The complaint sought a declaration that establishing the Council Reserves account and disbursing public funds as described in the complaint violated "the applicable statutes, Constitutions, ordinances, and policies." The complaint also sought preliminary and permanent injunctions against the County's "appropriation, expenditure, disbursement, and donation of public funds from the 1996-97 'Council Reserves' in violation of the S.C. Constitution and Code and the Greenville County Codes [sic] regarding procedures for appropriation and expenditures."

Sloan subsequently filed a motion for summary judgment. In his supporting memorandum, Sloan explained his allegation that the Council Reserves account violated section 7-81 of the County of Greenville, South Carolina Code of Ordinances (Greenville County Code) as follows:

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[Section 7-81(b) requires that] all "requests for county funds will be submitted to council for review during the regular county budget process . . . ." Rather than the entire council reviewing "requests for county funds" that are "submitted for council review during the regular county budget process," individual council members receive requests throughout the year and respond to them by submitting individual requisitions to the clerk of county council . . . .

(emphases added). The summary judgment motion and supporting memorandum requested, among other relief, an order enjoining Council's appropriations of public funds to entities when: (1) the appropriations were not made by County Council as a whole, but rather by individuals in violation of section 7-81(a) of the Greenville County Code, and (2) the requests were not submitted to Council during the regular county budget process, in violation of section 7-81(b) of the Greenville County Code. On February 10, 1998, the circuit court conducted a bench trial on stipulated facts. The circuit court subsequently issued an order concluding that the County was entitled to judgment in its favor, with one exception not relevant to this case.1 Sloan did not appeal this order.

Subsequently, on August 2, 2005, the County passed an ordinance adopting its budget for the 2006-07 fiscal year. Included in the operating expenses for the County Council Division of the Legislative and Administrative Services Department were line items for the Council Reserves, which included a separate line item for each Council member. Each individual Council member's routine expenses were funded from these line items. The line items were also available to fund costs "associated with special, non-recurring community requests for infrastructure purposes" and for "contributions to local governments in Greenville County for community projects." More specifically, these expenses and costs, designated as "Council District Expense," were described by the County as follows:

Funds for a Council Member to address:

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•Cost of general business supplies such as pens, paper, stationary, . . . ;
•Cost of special documents, incentives and awards given either to the public or county employees . . . ;
•Cost of periodicals, professional journals, and reference books;
•Cost of per diem and mileage involved in the conduct of county business;
• Costs associated with community functions, conferences and training seminars . . . ;
• Costs associated with special, non recurring [sic] community requests for infrastructure purposes such as:
• Flooding
• Roads
• Lights
• Sewer and drainage
• Public buildings and grounds
• Infrastructure related studies
• Contributions to local governments in Greenville County for community projects; . . . .

In 2006, SCPIF filed the present action, challenging the Council Reserves account, a/k/a the "Council District Expense" account, within the County's 2006-07 budget.2 In its complaint, SCPIF specifically challenged "[c]osts associated with special, non[-]recurring community requests for infrastructure purposes[.]" The complaint's sole cause of action states, "Council's delegation of legislative power to an individual member . . . is unconstitutional and illegal, as explained in a South Carolina Attorney General opinion dated November 13, 2003[.]"3

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SCPIF attached a copy of the November 13, 2003 Attorney General opinion to its complaint as an exhibit. The opinion addressed the use of separate funds created by the Florence County Council for each individual district of Florence County, to be spent for "road paving or infrastructure improvements" at the discretion of the council member for each respective district. The opinion concluded, "[A] court would likely conclude that the delegation of discretion to individual members of county council to determine how these funds are spent is unconstitutional." In footnote 2, the Attorney General stated, "The constitutional principle of separation of powers applicable to state government by Article I, § 8 of the [South Carolina] Constitution has been held inapplicable to local political subdivisions of the State[,]"4 and "County Councils typically exercise the powers of all three branches of government." Nevertheless, the Attorney General concluded, "the legislative and discretionary decision-making authority may not be delegated."

In its complaint, SCPIF sought injunctive relief as well as a declaration that Council's "delegation of [its] discretionary spending authority" was "illegal, invalid, and unconstitutional[.]" The County submitted a motion to dismiss, and the parties submitted cross-motions for summary judgment. In its motion to dismiss, the County asserted that the present action was barred by res judicata and collateral estoppel. However, at the motions hearing, the County expressly waived its collateral estoppel defense.

Relying on Commissioner of Internal Revenue v. Sunnen, 333 U.S. 591 (1948), the circuit court concluded that the action was not barred by res judicata by reasoning that the County's different fiscal years were comparable to the different tax years at issue in Sunnen. The circuit court also ruled that the creation of the Council Reserves account constituted an illegal delegation of legislative authority by Council to its individual members. However, the court declined to base its ruling on constitutional grounds, stating: "Plaintiffs have alleged a Constitutional basis for the legal proposition that County Council may not delegate legislative authority. However, Defendants' concession that County Council may not delegate legislative authority makes it unnecessary to decide whether this prohibition is based on the Constitution or not."

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In a separate hearing, the circuit court received...

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